Before Leaping on the Metric Bandwagon, Define It

18 November 2011
by:
Subadhra Sriram

Everyone’s talking about metrics in the industry. From time to fill, submittal rates, open rates etc., the verbiage is being tossed around. SIA’s VP of research, Jon Osborne fields dozens of calls from suppliers asking for the “right range” for various metrics. But here’s why it’s impossible to provide that range today. Every company measures these metrics differently. The very people touting metrics should know that metrics can be one’s worst enemy if they are not defined to measure the critical performance indicators that are important to the business.

What we need are standard definitions. Tom Tisdale, SVP North American sales at Peoplefluent, told me, “You have to actually take a step back on what we are going to measure. So if I'm looking at a supplier, [as an industry] we need to get common definitions that everybody measures suppliers against. We need to do this against the key performance indicators of time, quality, cost and alignment.”

Or else it’s meaningless. Customers get right down to rates. But there’s more to it than that. If a customer has a supplier that fills positions with quality candidates consistently, the client would probably want to keep that supplier on regardless of rates. And for their part, the suppliers are not going to raise prices unreasonably.

That’s where vendor management systems (VMS) come in. We have to make sure that data is available and measureable. Then the VMS can do its job. As contingent workforce programs mature, the VMS is no longer regarded as a bad word. Suppliers get it, yes the VMS does lower margins, but in return we get an efficient market place. Once common definitions are established the VMS can take the data and provide us with ranges, rates, variations – the works. We now know what works and what doesn’t. You can then set standards. But if the data is not captured and subsequently measured, then it all comes to naught.

So whose responsibility is it to provide the definitions? We have all have to work together to do this. And Staffing Industry Analysts will pitch in. Once that is accomplished, “the VMS actually becomes a hero to suppliers,” Tisdale says. Suppliers can see where they excel and where they need to improve. Now metrics and benchmarking become useful. The irony is that the staffing industry is inefficient because of the lack of metrics. So let’s start changing that.

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